The surge in rental demand is over, but rental demand will probably remain stronger than pre-pandemic levels. That suggests the prop to rents growth in 2025 and 2026 from solid demand will fade only slowly. Fundamentally, changes in rental demand are …
13th March 2025
We expect the SNB to cut its policy rate by 25bp next week to take it to 0.25% in response to the very low inflation rate early this year. But we think that will be the last cut of the cycle, as underlying price pressures have not been as weak as we …
The vote on Brazil’s 2025 budget (likely next week) will put renewed attention on whether the primary deficit will be kept low enough to comply with the government’s fiscal rules. But the key point is that Brazil’s weak public debt dynamics owe more to …
The strong inflation data so far this year supports our view that the Riksbank has already ended its loosening cycle and will keep its policy rate at 2.25% next week. And we expect the policy statement to focus much more on the upside risks to inflation …
For all the focus on a possible ‘Trumpcession’ and the related risks to US oil demand, it is worth noting that oil demand growth is already anaemic and our view on the US economy is consistent with demand stagnating or contracting slightly in 2025. While …
Weak economy finally taking its toll on housing demand February’s RICS survey suggests the downside risks to our 2025 forecasts for housing demand and prices from the weak economy continue to grow. But bigger falls in mortgage rates than most expect over …
The policy turnarounds that have continued in Argentina, Egypt, Nigeria and Turkey have led to a sharp reduction in sovereign risk premia but have had mixed success in restoring macroeconomic stability so far. We remain most optimistic on the outlook for …
12th March 2025
Although the Bank of Canada cut interest rates by 25bp again today, it also warned that “monetary policy cannot offset the impacts of a trade war” and that it must guard against tariff-related rises in price inflation. This suggests that the Bank is …
South Africa’s 2025 Budget speech was (finally) delivered but it’s not at all clear whether the plans will be approved given the DA’s opposition to the proposed VAT hike. We think there is more horse trading to be done, with Finance Minister Godongwana …
Events of the past week or so have worsened the outlook for German commercial property. While more government spending could marginally boost rents, the higher outlook for interest rates will outweigh this positive, and will likely put upward pressure on …
Kenya’s 2025/26 budget has set out ambitious revenue-raising plans that we think will be tough to achieve and some fiscal slippage is inevitable. The result is that, in the absence of further fiscal consolidation efforts, Kenya’s public debt-to-GDP ratio …
While January’s JOLTS report was not much to shout about, timelier labour market data suggest conditions look set to worsen amid DOGE’s gutting of the federal workforce. We remain optimistic for now, though, given the health of private sector hiring in …
11th March 2025
The sharp drop in retail rents seen during the pandemic coincided with a surge in rents for distribution warehouses and, as a result, the difference between the two is at a record low. That will help physical retail stores compete with online and …
10th March 2025
The announcement by Brazil’s government that it will cut import tariff rates to zero for several food products underscores the government’s concerns about rising inflation and its own falling popularity. While we doubt the measures will do much to stop …
The latest IPF Consensus Survey was broadly unchanged from the previous forecast round. Total returns at the all-property level are forecast to be 8.0% p.a. over 2025-29, with views ranging from a high of 9.3% p.a. and low of 7.1% p.a. That puts our …
7th March 2025
Alongside today’s decision to cut the deposit rate from 2.75% to 2.50%, the ECB adjusted its messaging to signal that the outlook for monetary policy has become less clear. We still think that the Bank will lower interest rates further but now forecast …
6th March 2025
The unravelling of US exceptionalism in stock markets since Donald Trump returned to the White House on 20 th January has been mainly driven by concerns about the US’ dominance of AI and the relative health of its economy (which has also dragged down …
Although our forecast for first-quarter GDP growth is now down to -1.9% annualised, we still believe that, on balance, the US economy will escape recession and rebound in the second quarter, as the distortion caused by the unseasonably severe winter …
In this Update , we put into context the recent surges in Bund yields, German equities, and the euro that have been triggered by expectations of a significant loosening of fiscal policy in Europe’s biggest economy. We have discussed here the economic …
Vietnam has seen a surge in exports to the US in recent years and arguably emerged as the biggest winner of Trump’s first trade war with China. However, Vietnam’s huge bilateral trade surplus with the US makes it a likely target for penal tariffs in …
Five years ago, we were downbeat about the immediate prospects for the largest city real estate markets, the so-called gateways, and that view has proved correct. But we also argued that this malaise would be short lived and strong fundamentals would be …
5th March 2025
February’s batch of PMIs across the Gulf were generally softer and we think that non-hydrocarbon sectors in the Gulf will record weaker growth this year. In contrast, Egypt’s economy appears to be recovering from its slowdown last year induced by shift …
Although industrial metals prices have risen following the National People’s Congress (NPC) in China, we still think that prices will fall over 2025 and 2026 given that the policies outlined do not go far enough to address the structural headwinds facing …
The agreement on a reform of the national fiscal rule reached by Germany’s likely next coalition partners suggests they will implement a significant fiscal stimulus of perhaps around 1% to 2% of GDP over the next two years. This could lift GDP growth by …
Prabowo Subianto came into office in Indonesia in October pledging to raise economic growth to 8%, up from around the 5% rate it has been stuck at recently. However, the policy changes he has introduced so far risk causing trend growth to slow. One of …
The ‘race for space’ following the pandemic and shift to remote work is evident in both the UK and US, with houses becoming more expensive relative to flats. And that premium for larger homes looks set to endure. While there may be a further small …
4th March 2025
The news that Aramco, Saudi Arabia’s state-owned oil company, will cut its dividend payout this year will put a dent in the Kingdom’s public finances and, together with a likely decline in the state’s oil revenues, may ratchet up pressure for more fiscal …
Tariffs have already boosted commodity prices in the US, and the risks to global prices and trade flows will only grow if tariffs become more widespread. Our Oil and Metals Tariff Impact Trackers are the go-to resources to keep up with the impact of …
OPEC+’s plan to increase oil output by 2.2m barrels per day over the next 18 months or so risks saturating the global market and highlights the downside risks to our already below-consensus oil price forecasts. Despite ongoing tensions within OPEC+ about …
The 25% tariff on all US imports from Mexico that came into force today will, if it stays in place, knock Mexico’s economy into recession in the coming quarters. A contraction in GDP this year of 1% would be plausible. And unlike Canada and China (also …
The events of the past two weeks have called into question whether the US is severing ties not just with adversaries such as China but also allies, including Canada, Mexico and the European Union. This would radically alter the shape of the fractured …
If the US tariffs remain in place, Canada will undoubtedly fall into recession. The limited decline in the loonie so far suggests markets are still pricing in a quick U-turn from the Trump administration. But even if the tariffs are soon lifted, their …
Japanese firms will suffer some collateral damage from the 25% US tariff on imports from Canada and Mexico. And if Trump presses ahead with tariffs on imports from Japan, carmakers would be most affected. Nonetheless, we suspect that the sales of Japanese …
President Donald Trump’s has claimed that there is “no room left’ for Canada and Mexico to avoid the imposition of 25% across-the-board tariffs at midnight tonight and he has reportedly signed a separate Executive Order raising the tariff rate on Chinese …
3rd March 2025
Our updated analysis of the most attractive apartment markets for remote workers sees Austin nudge Nashville into second place after two years at the top of the table, with San Antonio climbing to third. On the other hand, Tampa fell from fourth to …
The small uptick in the EM manufacturing PMI in February appears in part to be a result of the front-running of US tariffs, and is unlikely to be sustained. For now, the surveys continue to point to weak goods price inflation across the emerging world. …
The latest PMIs suggest that global industrial activity gained some momentum in February. But with more US tariffs on manufactured goods likely to come into force in the coming months, any rebound in industrial activity could prove short-lived. Meanwhile, …
The modest uptick in Australian house prices last month is unlikely to mark the beginning of a meaningful rally. With the Reserve Bank of Australia set to deliver a shallow easing cycle, housing affordability will remain stretched, weighing on the …
With US tariffs now escalating, the key question is whether the People’s Bank (PBOC) will allow the exchange rate to adjust in response. We think it ultimately will, just as it did during the first trade war. But if we’re wrong and the PBOC attempts to …
28th February 2025
The near-term picture for China’s equities looks brighter than we’d previously thought, and we’re revising up our forecasts for them significantly. But, we still think they will underperform those in the US, for example, over the remainder of 2025. …
The EU’s Clean Industrial Deal and Omnibus packages mark a shift in climate policy as pushback against the costs of climate action grows. With the EU less willing to impose costs on the private sector, there is a growing risk that it does not follow …
27th February 2025
President Trump’s attempts to reset relations with Russia have led some to suggest that he may be attempting to break apart the Sino-Russian alliance as Nixon did in the early 1970s (although in Nixon’s case, by reaching out to China). But while this may …
The threat of lower oil prices and the Angolan government’s apparent reluctance to push through (further) fiscal consolidation measures has raised the risk that it will be the next African sovereign to default on its debt. If that transpires, large debts …
Notwithstanding recent setbacks, we continue to think that this year will see a major rally in US equity markets, higher Treasury yields, and a stronger dollar. Many of the key trends in financial markets in the run-up to and immediate aftermath of the US …
Could uncertainty weigh on the global economy? Instead of clearing up the uncertainty about the direction of US economic policy, Donald Trump’s victory in last November’s presidential election has only magnified it, with threats of massive punitive …
It is very unusual for the Bank of England to be cutting interest rates when inflation is above the 2% target and is expected to rise further. There’s a growing risk, then, that inflation fears will force the Bank to stop cutting rates. Equally, though, …
Policy support is helping developers secure financing and should boost their sales this year. This will allow them to intensify work on existing projects. But it won’t prevent homebuilding activity from declining further over the coming years as the …
Bank Indonesia now owns a larger share of government bonds than some DM central banks did at the height of their pandemic QE programmes. Amidst worries that the fiscal guardrails are coming off, BI’s continued bond purchases could create the impression …
Argentina’s President Javier Milei has pledged to remove capital controls but we think that a major change in Argentina’s exchange rate setting before the mid-term elections in October is unlikely. And even then, our sense is that the removal of capital …
26th February 2025
This Update answers some key questions on the recently agreed US-Ukraine minerals deal. In short, estimates of Ukraine’s mineral wealth seem to be overblown and the deal suggests that US support for Ukraine under Trump is likely to come with strings …
